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Auction Rate Securities Settlements

Investment banks Morgan Stanley and JPMorgan Chase agreed today to pay billions of dollars to investors who were tricked into buying auction rate securities (ARS). NBR correspondent Erika Miller reports on the latest in a string of ARS settlements.



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Who is Covered?

Only certain Morgan Stanley and JPMorgan Chase investors will receive refunds as a result of today's settlement with the New York State Attorney General's Office. Those investors are listed below.

Related NBR Stories & Links

• 08-13-08: Banks are Making Achieving the American Dream Tougher
• 08-08-08: "XChange, The NBR Blog" - Citi's Action de minimis
• 08-07-08: Citigroup's Auction-Rate Security Buy Back
• 04-18-08: Citigroup & Caterpillar Calm The Volatile Markets

External/Links Articles*

• Jake Zamansky's Blog
  Jake Zamansky of Zamansky & Associates is a securities fraud attorney. He is interviewed in Erika Miller's report. This links to an August 14, 2008 blog entry he authored titled, "What the Auction Rate Securities Settlement Doesn't Do."
• JPMorgan Chase
  This links to an August 14, 2008 press release issued by investment bank JPMorgan Chase. The press release is titled, "JPMorgan Chase to Settle with State Securities Regulators and Offer to Purchase Certain Customers' Auction Rate Securities."
• Morgan Stanley
  This links to an August 11, 2008 press release issued by investment bank Morgan Stanley. The release is titled, "Morgan Stanley to Repurchase Auction Rate Securites." The release offers details of which investors are eligible for the buyback program, which is part of the settlement announced by the New York State Attorney General's Office.
• New York State Attorney General's Office
  This links to an August 14, 2008 press release issued by the New York State Attorney General's Office. The press release is titled, "Attorney General Cuomo Announces Settlements with JP Morgan and Morgan Stanley to Recover Billions for Investors in Auction Rate Securities."
• Securities and Exchange Commission (SEC)
  This SEC regulates equity markets in the U.S. This links to a August 7, 2008 SEC press release titled, "Citigroup Agrees in Principle to Auction Rate Securities Settlement." The details of the Citigroup settlement share some similarities with the details of the Morgan Stanley and JP Morgan Chase settlements.
• State of California (PDF Document)
  This links to an August 2004 issue brief titled "Auction Rate Securities" published by the California State Treasurer's Office. While the brief does not address the recent ARS buybacks, it does serve as a good primer for information about auction rate securities.

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